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Energy / Results of renewable subsidy auction delayed

Photo: Shetland News

WIND FARM developer Viking Energy will have to wait a little longer  to learn if it will be awarded government subsidy for its 103-turbine project in the central mainland of Shetland.

Results of the UK Government’s Contracts for Difference (CfD) scheme for low carbon electricity projects, which could pave the way for the controversial project to go ahead, are now expected on 19-20 September at the earliest following a legal challenge to the bidding process.

The announcement was initially due around two weeks earlier, but a legal challenge to the process from Durham’s Banks Renewables has meant that the closing date for bids has been extended.

Banks Renewables argues that consented onshore wind farms should have been included in the latest CfD round. In this particular auction only consented offshore wind projects and remote island wind farms can apply.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “Our Contracts for Difference scheme has supported the investment of £490m annually in renewable technologies and more than 50 per cent of our energy now comes from low carbon sources – a vital part of our move to becoming a net zero emissions economy by 2050.

“We run the scheme lawfully and will be contesting this claim.”

The deadline for sealed bids has now been extended to 29 August as a result of the legal action.

The CfD scheme is government’s main mechanism for supporting the deployment of new low carbon electricity generation, with the aim of reducing the capital outlay for developers while minimising the cost to customers.

A successful bid from the Viking Energy project, which is controlled by Scottish & Southern Energy, is expected to then lead to an undersea interconnector cable getting the go-ahead which is needed to allow large renewable projects like the wind farm to export energy to the national grid.

Once CfD auction winners start to generate electricity they are paid the difference between the ‘strike price’, which is determined by the competitive auction, and the ‘reference price’ – a measure of the market price for electricity in the British market – for each unit of green electricity exported.

Viking Energy ground investigation works began in July to advise the planning of the main development, with construction on the wind farm slated to start in May 2020, or earlier.

Concern has been expressed by campaign group Sustainable Shetland, however, over the impact the ground works is having on the local environment, while questions have also been raised over whether all the necessary consents are in place to do the work – leading to Shetland Islands Council’s planning service seeking legal advice.